AF Gruppen sees strong growth and a record-high order backlog for the first quarter of 2022
Turnover for the 1st quarter was NOK 6,809 million (6,209 million) and profit before tax amounted to NOK 209 million (245 million). This corresponds to a profit margin of 3.1 per cent (4.0 per cent). An exceptional order intake resulted in an order backlog of NOK 42,697 million (33,818 million) at the end of the quarter.
AF Gruppen is in a very strong financial position. Cash flow from operating activities was NOK 607 million (205 million) for the 1st quarter of 2022. As at 31 March 2022, AF Gruppen had net interest-bearing receivables of NOK 371 million (46 million). Earnings per share for the quarter were NOK 1.39 (NOK 1.55). The Board proposed to the General Meeting of shareholders a dividend of NOK 6.50 (6.50) per share for distribution during the first half of 2022.
“It is pleasing with a record-high order backlog and that the business areas Civil Engineering, Offshore and Energy and Environment reported very good results in the quarter.
At the same time, there are profitability challenges in several of the construction units as a result of the ripple effects from the war in Ukraine and new shutdowns in China. Increased raw material and energy prices as well as delivery challenges had a negative effect on the results this quarter. We work closely with clients, suppliers and subcontractors to ensure stability and profitability for the projects,” says Amund Tøftum, CEO of AF Gruppen.
AF imposes the same strict requirements on all its partners and suppliers as it does on its own employees. Everyone should arrive home safely from our projects, and figures from subcontractors are included in the injury statistics. The LTI rate for Q1 was 0.9 (1.5).
AF works in a systematic and targeted manner in order to avoid work-related absence. Absence from work due to sickness for Q1 was 5.5% (5.2%). Both this year and last year, absence from work due to sickness for the first quarter was impacted the Covid-19 pandemic.
AF provides a wide range of services that solve society's climate and environmental challenges. This also applies to AF Gruppen's onshore and offshore demolition activities, where over 95 per cent of all material from demolition is sorted for recycling. Metals, especially steel, are one of the main raw materials that are recycled. The total volume of steel recycled in the first quarter represents a reduction in alternative CO2 emissions of 27,806 tonnes compared with ore-based steel production.
“AF has a strong position in the demolition and recycling of offshore installations in the North Sea, and we see a significant growth potential globally. With more than 15 years of experience from complex projects for world-leading players, we have a good basis for further growth in an area where strong demand is expected in the coming years. Here, our goal is to make a contribution to the green transition with good profitability,” says Tøftum.
Selected highlights from the quarter:
- Civil Engineering reported solid profitability and had a record-high order backlog at the end of the quarter. AF Anlegg entered into a contract with the City of Oslo to build drinking water tunnels in Oslo, in a working partnership with Italian company Ghella. The total value of the contract is approximately NOK 8,750 million excluding VAT for the working partnership, of which AF Gruppen's share is 60%. An agreement was also entered into and implemented for the purchase of 80% of the shares in Stenseth & RS during the quarter.
- Turnover for Building increased considerably compared to the same period last year, but profitability was low in the quarter. Price developments for raw materials such as steel and wood products have a negative impact on the profitability of the building units. Provisions have been made for future losses, particularly in the AF Nybygg portfolio, and estimates have been revised downwards as a result of higher material prices. Despite the price developments, Haga & Berg excelled with very good results in the first quarter. AF Bygg Oslo and Åsane Byggmesterforretning also delivered good results in the quarter.
- Overall, Betonmast delivered weak profitability in the quarter, and the level of activity was at the same level as the same period last year. High material prices also affect the units of Betonmast, and there is a great deal of variation in the earnings of the units. Since 2022, Betonmast Sweden has become part of the Swedish business area, and the comparison figures have been restated.
- Property had low sales of residential homes in the quarter. There were six residential property projects in the production stage at the end of the quarter, and the sales ratio for commenced projects is 86%. An agreement was signed during the quarter for the sale of all shares in the company that owns the hotel and offices building Karvesvingen 7 at Hasle in Oslo. The building has a gross floor area of 21,056 square metres, and AF Eiendom's share of the sale is 49.5%. The transaction was completed in April 2022.
- Energy & Environment had a good start to the year with higher margins and a high order intake. AF Decom delivers demolition and recycling services with good profitability.AF Energi delivered results below expectations in the quarter, with variable profitability in the project portfolio.
- AF’s Swedish operations in respect of civil engineering, building, property and demolition are combined in the Sweden business area. Sweden increased its turnover compared to the same quarter last year, while the result was somewhat lower. The civil engineering company Kanonaden achieved a 12% revenue growth compared to the same quarter last year and the unit continues to excel with solid results. Price developments for important raw materials such as steel and wood products have a significant impact on projects, and the units have made provisions in the projects to take into account price developments.Since 2022, Betonmast Sweden has become part of the Swedish business area, and the comparison figures have been restated.
- In the Offshore business area, turnover increased by 15.6% compared to the first quarter of last year and profitability was good, with an operating margin of 9.4% during the quarter. AF Offshore Decom, which dismantles and facilitates the recycling of offshore installations, had a high level of activity in the quarter and significantly improved profitability compared to the corresponding quarter in 2021. The good result in the quarter reflects high production and good operations as well as the positive impact of the sale of precious metals.
Contacts
Amund TøftumCEO
Tel:+47 920 26 712Amund.Toftum@afgruppen.noKnut Ekern
VP Communications
Sverre HæremCFO
Tel:+47 952 45 167sverre.herem@afgruppen.noImages
About AF Gruppen ASA
AF Gruppen is a leading contracting and industrial group that was formed by an entrepreneurial spirit and execution capabilities. The group has 5,400 employees and revenue reached NOK 27 billion in 2021. AF Gruppen is listed on Oslo Stock Exchange (AFG).
We provide a broad range of services with seven operational business areas: Civil Engineering, Building, Betonmast, Property, Energy and Environment, Sweden and Offshore.
Subscribe to releases from AF Gruppen ASA
Subscribe to all the latest releases from AF Gruppen ASA by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from AF Gruppen ASA
Building a hotel and office building in Drammen22.3.2024 13:56:45 CET | Press release
Strøm Gundersen AS, a company within AF Gruppen, has been selected as the contractor for two contracts for the construction of a hotel and an office building in Brakerøya, Drammen. Both contracts are turnkey contracts and have a combined value of NOK 516 million excluding VAT.
Foundation assignment for the New E8 in Troms22.3.2024 13:44:35 CET | Press release
Fundamentering AS (FAS), a company within AF Gruppen, has entered into a contract with Metrostav Norge AS for foundation work on the Ramfjord Bridge in Troms. The client is the Norwegian Public Roads Administration. The contract is valued at approximately NOK 100 million excluding VAT.
Building 77 apartments in Bergen13.3.2024 09:40:47 CET | Press release
LAB Entreprenør, a company within AF Gruppen, has entered into an agreement with Gjelsten Bolig (formerly known as Profier) for the residential project Sjøbodene in Sandviken, Bergen. The contract is a turnkey project with an estimated value of approximately NOK 285 million excluding VAT.
Building a Biogas Plant in Voss1.3.2024 15:07:09 CET | Press release
LAB Entreprenør AS, a company within the AF Gruppen, has been selected as the contractor by BIR AS (Bergensområdets Interkommunale Renovasjonsselskap) for the construction and infrastructure of a new biogas plant in Voss. The contract is a turnkey project with an estimated value of approximately NOK 120 million (excluding VAT).
Building 178 apartments in Bergen22.2.2024 12:00:32 CET | Press release
LAB Entreprenør AS, a company in AF Gruppen, has entered into an agreement with Sandsli Stasjon AS, a wholly-owned subsidiary of Nåbo AS (formerly Bonava), for the residential project Sandsli Stasjon in Sandsli, Bergen.
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.
Visit our pressroom